Nagpur Metro Rail loan deal with German agency KfW on April 1
Nagpur: In a major boost for the city’s Metro Rail project, German government funding agency KfW will sign the loan agreement with union finance ministry on April 1 in New Delhi. The approval from state government in this regard is expected on Tuesday.
Brijesh Dixit, managing director of Nagpur Metro Rail Corporation Limited (NMRCL), said the state government had to prove that it had the debt taking capacity. “It will have to submit a certificate in this regard.”
KfW has agreed to provide a loan of 500 million euros (roughly 3,700 crore) to NMRCL. Once the loan agreement is signed with the Centre, NMRCL will sign a project agreement with KfW. “Since the project is being executed in Nagpur, we have asked KfW officials to sign this agreement here. The draft of this agreement is being prepared by us. It will contain details of how we would execute the project,” Dixit said.
The process of sanctioning the loan had begun in June 2015. It took ten months for processing. Dixit expressed satisfaction over the pace of work. “In most cases, such big loan agreements take two years for fruition,” he said.
The MD further said that the loan agreement with French agency Agence Francais de Developpement (AFD) will be signed in May. “We need 1,000 crore this year. 500 crore will be loan and the remaining amount will be central and state government contributions. Both have assured to provide us the necessary funds by the year end. State government has allocated 180 crore in the budget and the remaining amount will be provided through supplementary grants,” Dixit said.
The MD said that the loan will be disbursed in instalments. “We will get the loan money as and when required. There is no point in taking it earlier than it is required as we will have to pay interest on it,” he added.